**Powell Stresses Inflation Caution as Fed Holds Rates Steady**
Federal Reserve Chair Jerome Powell delivered a cautious message on June 18, 2025, as the central bank decided to keep interest rates unchanged at 4.25%–4.50%. While the Fed's official projections still suggest the possibility of two rate cuts by the end of the year, confidence in that outlook is fading. Seven out of nineteen Fed officials now expect no cuts at all in 2025, up from four previously.
Powell warned of “a meaningful amount of inflation” expected in the coming months, citing rising energy prices and new tariffs as contributing factors. He emphasized that any policy moves would be driven strictly by economic data, reaffirming the Fed's commitment to its inflation target.
Markets reacted with caution. Treasury yields climbed, and stocks turned mixed during Powell’s remarks. The Nasdaq managed a slight gain, while the Dow and S\&P 500 remained flat or dipped slightly. Investors interpreted Powell’s tone as hawkish, with rate cuts appearing less certain than before.
In the crypto sector, digital assets like Bitcoin and Ethereum pulled back modestly in response to the hawkish stance. However, crypto-related equities such as Coinbase and Circle rallied strongly thanks to the Senate's approval of the GENIUS Act, which introduces a regulatory framework for stablecoins. The contrast highlighted a growing divergence between traditional crypto markets and crypto-integrated equities benefiting from regulatory clarity.
Powell concluded by stating that the economy remains in a "solid position," and the Fed is “well‑positioned to respond in a timely way” if conditions shift. For now, the central bank appears focused on staying vigilant rather than pivoting.
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